Forex trading - USDZAR

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JayM

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As I understand it, it's not legal to send ZAR outside SA. But is it legal to trade forex pairs involving the Rand if you are an SA resident?

I've got a few million in SA waiting for excon approval to send out and want to hedge my position using my brokerage account in case president Zuma or something like that wrecks the ZAR even further.
 
Wow, found this response from Treasury to a DA MP in April 2020:

(1) No, forex trading by individuals is not allowed in terms of the Currency and Exchanges Act,1933 and the Exchange Control Regulations (the Exchange Control Laws). In terms ofthe Exchange Control Laws only Authorised Dealers (ADs) and Authorised Dealers withLimited Authority (ADLAs), appointed by the South African Reserve Bank (SARB), arepermitted to buy, sell, borrow or lend foreign currency. ADs and ADLAs may trade inforeign exchange for their own account as well as on behalf of their clients.

Individuals may use their foreign capital allowance (R10 million per annum) and the single discretionary allowance (R1 million per annum), to send funds abroad through the ADs.South African residents are not permitted to speculate against the Rand. South Africanresidents are bound by South African exchange control laws, even when exported fundsare exported.
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Here

That reply seems to imply ALL forex trading is not permitted in SA, which blows my mind. It's openly being offered here by various providers.
 
Also found this:

We refer to Exchange Control Circular No. 4/2022 and the announcement made bythe Minister of Finance in Annexure F of the 2022 Budget Review wherein it wasannounced that resident individuals may utilise the investment portion of their singlediscretionary allowance and/or foreign capital allowance to participate in online foreignexchange trading activities.These online trading activities generally include one or a combination of options, suchas trading global currencies against each other, trading a contract for difference,trading in foreign stocks, trading commodities including crypto currencies and tradingforeign indices using the online trading platform of the broker concerned.Residents should note that they may not fund their international trading accounts atregistered brokers using South African credit, debit and virtual cards, but such tradingaccounts should be funded in terms of the single discretionary and/or foreign capitalallowance, i.e. the Authorised Dealer concerned must convert the Rand into foreigncurrency and transfer such funds via the banking system as an Electronic FundsTransfer to a foreign bank account or the funds can be deposited in a foreign currencyaccount at an Authorised Dealer.
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So it seems that it changed in 2022. But the original question remains - is it legal to trade the ZAR an SA resident?
 
Use a forex swap now and then unwind it with a back to back when your sars clearance comes through....
 
JayM said:
Also found this:



So it seems that it changed in 2022. But the original question remains - is it legal to trade the ZAR an SA resident?
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Who would stop you if you out R100k in an EE USD account ? No one.

Your just need to make sure what your company forex allowance is from SARB. Know for normal plebs it’s R1mil but you can get up to R10mil after some paperwork
 
Pho3nix said:
Who would stop you if you out R100k in an EE USD account ? No one.

Your just need to make sure what your company forex allowance is from SARB. Know for normal plebs it’s R1mil but you can get up to R10mil after some paperwork
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EE doesn't even let you borrow ZAR, so that point is moot. My plan is to borrow R5M ZAR from IBKR and buy GBP or USD with it as a hedge against the shitshow that is unfolding in SA (until I can get excon approval to send some more of my cash offshore - this process is taking longer and longer).
 
its 100% legal, you can just do R1m under SDA and R10m under sars approval and upto R50m per annum with SARB approval.

Well you would convert ZAR to fx then send...

But you can open an unleveraged position with a USD/ZAR par just ensure its 1:1...
 
Forex Trading is not there for hedging.

The inter-day trading costs would ruin you.

Parking it in Easy Equites or some other USD based account would be a much better idea. Even just a global bank account.
 
SauRoNZA said:
Forex Trading is not there for hedging.

The inter-day trading costs would ruin you.

Parking it in Easy Equites or some other USD based account would be a much better idea. Even just a global bank account.
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The problem is I need a tax clearance for that (waiting on it, taking much longer these days). This would only be 2 trades - one to open the short position, and one to close it once I can purchase forex again. I'm willing to pay the interest cost + trade fees to ensure I don't get wrecked by a crashing rand over the next few weeks.
 
JayM said:
The problem is I need a tax clearance for that (waiting on it, taking much longer these days). This would only be 2 trades - one to open the short position, and one to close it once I can purchase forex again. I'm willing to pay the interest cost + trade fees to ensure I don't get wrecked by a crashing rand over the next few weeks.
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Im not sure how long you are waiting...

But...

Let me tell you something I have done hundreds of these sars clearances over the last 5 years and the last year in particular takes anywhere from 1.5-4 months. So just a heads up.
 
Snyper564 said:
Im not sure how long you are waiting...

But...

Let me tell you something I have done hundreds of these sars clearances over the last 5 years and the last year in particular takes anywhere from 1.5-4 months. So just a heads up.
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I've done a half dozen over the last couple of years, and I know it takes longer now, hence wanting insurance.
 
Snyper564 said:
An alternative more risky approach is to purchase up s&p etfs that are dollar hedge anyway
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You meen a feeder fund type of arrangement? I don't have a brokerage account in SA for that.
 
Snyper564 said:
Lol takes a week.

Have done hundreds in the last year not one has taken a week.

In the past yes in the last year 1.5-4months.

Small amounts may be quicker tho
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ok 5 days to be exact - there is 1M discretionary and above so no diffs if 2 or 10M

1717348599962.png
 
@yogidabear assuming you do it via the PC not app?

These have been mine over the last period but dam yours has been fast.

Seems very hit and miss.

1717349023861.png
 
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